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Emerging Markets Roundup: Middle East

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The Gulf Cooperation Council and the European Union are aiming to sign a free trade agreement at a joint ministerial meeting in Luxembourg on June 14. The GCC and the EU began the FTA negotiations in 1990. The only remaining issue to be resolved is the imposition of export duties by some GCC countries. The FTA talks were suspended in 2008 over this same issue. Some GCC countries charge export duties on petrochemicals, but these duties can exist only in limited form under the FTA. The two parties to the proposed agreement are major trade partners. The EU is the largest trade partner for the GCC, and the GCC is the EU's fifth-largest export market.

Meanwhile, ConocoPhillips, the third-largest US oil company, is pulling out of energy projects in the region. The Houston-based company announced that it is withdrawing from a multibillion-dollar joint venture to develop a gas field in Abu Dhabi, the capital of the United Arab Emirates. A week earlier, ConocoPhillips said it was pulling out of Saudi Aramco's Yanbu export refinery project. The US oil company is selling assets to reduce its debt burden. It recently sold its stake in a Canadian oil sands project to Sinopec, one of China's largest energy and chemical companies, for $4.65 billion.

The Jordanian government signed an agreement in May with the state-run Estonian firm Eesti Energia to exploit Jordan's enormous oil shale resources. Under the deal, the Estonian company is expected to invest up to $6 billion over 10 years to extract oil from a rock formation in central Jordan. The company also agreed to build a $1.5 billion power plant that will be fueled by burning oil shale.